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Does the minimum wage kill jobs?

pete said:
its all frippery. economics is more theory than science.
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Weeeelllll . . .

The nice thing about Mathematics and other Hard Sciences is that there is no question that 2 + 2 = 4.

The complicated thing about Sociology and other Social Sciences is that there's room for interpretation and debate note Are '2' and '2' satisfactory evaluations based upon sound criteria? Is there a margin for error? Are '+' and '=' the correct operations to be accounting for? Is the product of the process, 4, the problem or the solution? Are we even asking the right question in the first place (or is someone out to prove something)? And, why ask at all when the answer is so obvious? This could be an indication that someone else should be chosen to ask the questions in future - they're wasting our time - though then again, this happened back in '07 and no-one batted an eyelid. We should really look into that..

The horrifying thing about Economics is that both of these are true.

This violent collision leaves a few absolutes to take refuge behind, and a wide open mine field for catastrophic assumptions and mistakes, and prime Flame Bait. There are a fair number of widely divergent economic schools of thought, each with a reasonable claim to accuracy, and each which believes the others to fail economics forever. The major difference between this schools is in what they decide to grossly oversimplify in their bid to understand something. This is probably one of the reasons Thomas Carlyle called economics "the dismal science". (And few agree on that term... Economists will claim their science isn't dismal, and many other fields will claim it's not a science. The dance goes on.) note Actually the reason why Carlyle called the economics "the dismal science" was because John Stuart Mill and his fellow economists supported the equality between all men and the abolishment of the slavery, and Carlyle was afraid that the economics would cause the decadence of the society.
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There was a welfare queen on TV clamming up about the latest neighborhood shooting. She had about six piercings and a black leather Chicago Bulls cap that I can't afford (and I work). It looks like only saps work. Welfare's the way to go.
 
vetteman said:
Milton Friedman has already demolished the liberal argument that it doesn't.
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Notice how the Vettebigot, #LitsPussiestMarine, never supplies a link to back up his claim. That's almost a complete certainty that Friedman said no such thing.

#VettemanDisgraceToTehUSMC
 
vetteman said:
Milton Friedman has already demolished the liberal argument that it doesn't.
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Cite? One reasonably and naturally tends to suspect citations of Milton Friedman for, well, absolutely anything for which Milton Friedman might be cited.
 
Ramone45 said:
There was a welfare queen on TV clamming up about the latest neighborhood shooting. She had about six piercings and a black leather Chicago Bulls cap that I can't afford (and I work). It looks like only saps work. Welfare's the way to go.
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Yes, quit working because gov assistance is sooooo much better....fucking DO IT!!

NeverEndingMe said:
if only you obama idiots had a job or b. created jobs

enjoy the welfare
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I will, thanks!!!:D

4est_4est_Gump said:
Jesus Jenn, that was a dumber than dirt reply.
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She's doing better than your sorry ass.

4est_4est_Gump said:
Oh gawd, the same old fallacy...

:eek:

It gets tiring. No metric measures jobs not created.
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This retarded fukin' shit doesn't make 1/2 as much sense...

BobDownSouth said:
Notice how the Vettebigot, #LitsPussiestMarine, never supplies a link to back up his claim. That's almost a complete certainty that Friedman said no such thing.

#VettemanDisgraceToTehUSMC
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He is the pussiest of pussies......runs his cock holster a lot, writing check's his body can't cash, and then bouncing them like a total fuckin' cunt.
 
Even the Feds Admit Minimum Wages Cause Unemployment
Mises Daily: Tuesday, June 17, 2014 by Nicholas Freiling

This isn’t well known. Advocates of minimum wage often base their support for the measure on ethical grounds, claiming that all workers deserve a degree of compensation regardless of their productivity. Such was the reasoning of Seattle Mayor Ed Murray, who raised his city’s minimum wage last week to the unprecedented level of $15 per hour under the guise of “equal access and opportunity for all.”

Yet minimum wage advocates rarely address the issue of minimum wage exemptions. If minimum wage is supposed to help those who otherwise would not earn a “living wage,” why exempt people with disabilities — often the least productive of us all?

Ironically, Congress presumes the answer to this question is in the minimum wage legislation itself, undermining its logic in the process.

When Congress passed the 14(c) exemption along with minimum wage in 1938, they did so, as quoted above, “to prevent curtailment of opportunities for employment” of people with disabilities. The authors of the bill understood that minimum wage leads to unemployment for those “whose earning or productive capacity is impaired.” So in order to avoid the negative publicity associated with putting people with disabilities out of work, they exempted such people from minimum wage.

But this begs a question. If people with disabilities are exempt from minimum wage because their earning capacity is impaired and finding employment might otherwise be impossible, why don’t people without disabilities whose earning capacity is equally low also qualify for an exemption?

Admittedly, this question is opposite of that asked by most people who are aware of the 14(c) exemption. Where the exemption is known, it’s often derided as an act of discrimination against people with disabilities — not everyone else.
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http://mises.org/daily/6782/Even-the-Feds-Admit-Minimum-Wages-Cause-Unemployment
 
In truth, there is only one way to regard a minimum-wage law: it is compulsory unemployment, period. The law says, it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum-wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.

All demand curves are falling, and the demand for hiring labor is no exception. Hence, laws that prohibit employment at any wage that is relevant to the market (a minimum wage of 10 cents an hour would have little or no impact) must result in outlawing employment and hence causing unemployment.

If the minimum wage is, in short, raised from $3.35 to $4.55 an hour, the consequence is to disemploy, permanently, those who would have been hired at rates in between these two rates. Since the demand curve for any sort of labor (as for any factor of production) is set by the perceived marginal productivity of that labor, this means that the people who will be disemployed and devastated by this prohibition will be precisely the "marginal" (lowest wage) workers, e.g. blacks and teenagers, the very workers whom the advocates of the minimum wage are claiming to foster and protect.

The advocates of the minimum wage and its periodic boosting reply that all this is scare talk and that minimum-wage rates do not and never have caused any unemployment. The proper riposte is to raise them one better; all right, if the minimum wage is such a wonderful antipoverty measure, and can have no unemployment-raising effects, why are you such pikers? Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000?

It is obvious that the minimum-wage advocates do not pursue their own logic, because if they push it to such heights, virtually the entire labor force will be disemployed. In short, you can have as much unemployment as you want, simply by pushing the legal minimum wage high enough.

It is conventional among economists to be polite, to assume that economic fallacy is solely the result of intellectual error. But there are times when decorousness is seriously misleading, or, as Oscar Wilde once wrote, "when speaking one's mind becomes more than a duty; it becomes a positive pleasure." For if proponents of the higher minimum wage were simply wrongheaded people of good will, they would not stop at $3 or $4 an hour, but indeed would pursue their dimwit logic into the stratosphere.

The fact is that they have always been shrewd enough to stop their minimum-wage demands at the point where only marginal workers are affected, and where there is no danger of disemploying, for example, white adult male workers with union seniority. When we see that the most ardent advocates of the minimum-wage law have been the AFL-CIO, and that the concrete effect of the minimum-wage laws has been to cripple the low-wage competition of the marginal workers as against higher-wage workers with union seniority, the true motivation of the agitation for the minimum wage becomes apparent.

This is only one of a large number of cases where a seemingly purblind persistence in economic fallacy only serves as a mask for special privilege at the expense of those who are supposedly to be "helped."
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Murray N. Rothbard
http://mises.org/daily/6097/The-Crippling-Nature-of-MinimumWage-Laws
 
Better question: Does lowering wages "create jobs"?

Give you a hypothetical imaginary scenario where let's say, oh, several nationwide chains of pizza restaurants pay their drivers the minimum wage of approximately 8 dollars per hour, even when they're on the road.

(Hint: This is near-present-day historical fact, not a hypothetical. Play along)

Now, suppose, via the legal loophole of delivery drivers sometimes receiving tipped income, these same major companies argue they should be able to pay these drivers as if they were waiters, and thus, pay them half as much.

And lo and behold in the imaginationland of just a decade ago in the real world, this actually happened.

Now, if the drivers cost the company half as much....


Stay with me, this gets real complicated.​


If the drivers cost half as much, then obviously, the company hired twice as many drivers. Because the minimum wage was killing jobs.

Now, the company can "afford" to hire twice as many workers. Obviously. Ipso facto.

Only, here's this slight problem, where reality sets in.

If I'm running a pizza place, and my drivers deliver between 3-5 orders per hour, and I max out at about 20 orders per hour, that means I need about 5 drivers, at most.

Having more drivers to deliver the same amount of pizzas makes absolutely no sense.

So, it's not the minimum wage that's "killing jobs". What, pray tell, is the thing that drives job creation and/or destruction?

Why, that would be the obvious answer: Consumer spending.

Jobs are created when there is demand for products and services, meaning, if 30 people ordered for delivery every hour instead of 20, that would create approximately 3 additional jobs.


How does an economy improve in the area of consumer spending?

Who are most consumers? Depends on the area, but most consumer spenders are poor-to-middle class people.

Poor people spend, as a percentage of their income, almost 100 percent of their income on rent, food, and necessary expenditures. Therefore, if they were to, let's say, earn more money, all of a sudden....


again, bear with me, this gets really complicated....​


There would be more consumers..... spending. Or, the same amount of consumers, spending more. Which is the same thing, from a business viewpoint.

Now, let's look at the opposite scenario.

What if, by law, I had to pay those drivers the full minimum wage of 8 dollars per hour, and there was no loophole, and consumer spending didn't increase, but it didn't go down?

Well then, I'd probably pass on that cost increase to the consumer.

What would that cost be, exactly?

Well, I'll use my company as an example. As a percentage of sales, our labor cost is 13-18%, depending on the day.

So, if we do $3,000 in sales, we spend just over 500 dollars in labor.

Drivers make up less than half the staff, and only they would be getting a pay increase (which would actually just be restoring their previous pay levels).

So, 5 drivers suddenly earn 4 extra dollars per hour, during dinner time, and 2 drivers suddenly earn 4 extra dollars per hour, during lunch. 48 dollars plus 120 dollars is 168 dollars.

This is a total cost increase of 5.6 percent.

However, an entire class of worker is now effectively receiving 200% of what they had been making in income, and therefore, has twice as much spending money as before.

So, the price of a pizza pie goes from $10 to $10.56,

And, mind you, this means the pizza joint is making precisely zero less money, because they do not eat cost increases, they pass them on to you, so they can stay profitable, see also: how to run a business 101 for clinically retarded monkeys.

But the "minimum" wage worker has twice as much disposable income, which he or she will promptly do what with?


A) Burn it on a bonfire and cook marshmallows
B) Stick it in a mattress and never spend it ever because hoarding is fun
C) Spend every dime of it on rent, food, credit card debt, cell phones, pay-per-view movies, cable, buying a new vehicle, or clothes, etc.....


Which, which, which scenario is the most likely scenario?

I think it's option C.​


SO, let's recap:

Lowering wages BY RULE OF UNDISPUTED FACT does not actually create a job. The job is created when people spend money. Duh.

If demand lowers (such as when wages are depressed, or the economy is sluggish) then lowering wages won't incite a business to invest in more workers. They won't hire more people to do the same amount of work.

Why is that?

Because if a business could get away with having all that income but spending none of it on worker's wages, they would. If they could run at-profit and pay NOBODY, they would.

Lowering wages DOES NOT CREATE DEMAND. Lowering wages does not CREATE A JOB. It doesn't even restore lost jobs.

If an employer needs more workers to handle demand, that creates jobs.

If the employer will lose out on potential profits because there's 30 orders to be delivered in an hour, but only enough drivers to delivery 20 before they get cold and therefore discounted/free and profitless, then guess what?

Employer hires more people.

And at what wage?

The bare minimum legally allowed that they can still find workers to do the work.

And since there are always unemployed people, they could lower wages down to 2 bucks an hour, and still find people willing to work.

Is the country better off when an entire strata of our society earns 2 dollars an hour? Far below any reasonable level where they could pay any kind of bills unless they worked 70 hours per week?

Or is the country better off with a regulation in place that says, people cannot pay their living expenses unless you pay them X amount of dollars.

That X amount of dollars being determined by how much it costs to live.

That is what a minimum wage is: It is a vital and necessary protection given to both the employed AND the unemployed. Why the unemployed? Because, once they do become employed, they need to actually earn enough money to pay their bills. It makes no sense to live as a hobo and also work 70 hours per week.

The unemployed will not suddenly all find jobs if you lower the minimum wage to 2 dollars per hour.

The pizza company will still only need 5 drivers.

And as it turns out, when all the other minimum wage workers suddenly earn 2 dollars an hour, they can't afford to eat at a pizza place anymore.

Therefore, the demand would actually drop. You'd actually destroy jobs by destroying the living wage.

How do you know this is true?

Because when tens of thousands of middle income workers suddenly became unemployed between 2008-2009 and had to find work at McDonald's and Burger King, their finding a job did not magically restore the economy.

They earned less money.

And therefore spent less money.

And that creates a domino effect on everyone else, and more and more people lose money, and therefore, other jobs are cut, and hours are slashed, and that causes more and more people to lose money.

How does an economy turn around from that?

Stimulus spending helped bolster banks and rescue corporations which were on the brink of collapse, and well paying jobs were saved. That money was then spent, again, and again, and again, until lower-paying jobs like those in the service industry bounced back.

Unemployed persons were suddenly earning a wage. A shitty wage, but that meant they had money to spend.

Which, in turn, means other people had money to spend.

This is different from, let's say, a tax break given to a millionaire.

Did you know that if you give my boss' boss a big fat tax rebate of 10,000 dollars, he's not going to spend that on hiring people? No, he's going to add it to his personal retirement account, and invest it in things that will make him rich, and it will tie up those funds in the hands of the few, who will not spend it, but use it to hoard wealth.

When fewer and fewer people control and then hoard more and more wealth, and their personal needs are met (they're not suddenly going to buy twice as much food, or pay twice as many mortgage payments, or send their child to two colleges, for example) then they tend to stop spending money.

How an economy collapses is when policies are put in place which depress wages, and encourage people to stop spending money, or outright prevent the spending of money, and when more money is concentrated in fewer hands, it passes between fewer and fewer people, until there is no middle class. Only a large unemployed constituency, a very large serf-labor class, and a very, vanishingly tiny population of the super-greedy.

This is what happens when you destroy wages.

It does not create jobs. Jobs are not created by cutting off sources of spending, dumbass.

If you run a donut shop that has zero customers, but the manager is fabulously wealthy and doesn't care if he serves any customers, is that great for the economy?

How about a donut shop that has a thousand customers, and the manager is fabulously wealthy BECAUSE he is serving so many customers? Is that better or worse for the economy? How about the fact that, in order to make that fabulous wealth, he needs to hire 30 unemployed people to serve those thousand customers?

This is so fucking basic, that it boggles the human mind that this is even a discussion.

Minimum wages do not kill jobs. However, lower wages or stagnant wages QUITE OBVIOUSLY DO KILL JOBS, especially as inflation lowers the spending power of the dollar.

So, if lowering wages is bad for the economy, and stagnant wages are bad for the economy, what would be the effect of raising the minimum wage?

Remember the guy making $4 an hour who now makes $8 per hour?

He's spending twice as much money.

How about that $10 pizza that now costs $10.50?

There are more people with more money who are hungry for pizza. Ironically, MORE PIZZAS ARE PURCHASED.

But if all of these facts mess with your personal private religion which states that the living wage is a mortal sin, and medicaid is the devil, and public roads makes baby jesus cry, and having a police and fire station paid with tax dollars makes you want to go poopy in your pants, then I'm afraid you're just a moron, and I'd like a refund for all the money we, as a society, spent educating you in the public school system, since you're impervious to facts and knowledge, and this is a personal choice you made. Like being celibate. You decided you'd never allow actual thinking to penetrate your mind. And so, you are a brain virgin, forever owning a brain, but never using it.
 
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Yes it does.

When more people work, then aggregate spending increases. As spending increases demand for workers increases. As the available pool of unskilled workers begins to shrink, then competition for labor creates the desired increase in base wage levels. In order to retain the workers you trained previously, then of course you must raise them above the new, real, not artificially created, wage floor.

The fallacy just employed is examining the particular and applying it to the whole. It is not sufficient to say, if one person has less money to spend, then less money is spent when a second worker can now be hired and the two of them together spend more than one artificially created income and there is not the hidden cost of some sort of dole to the workers shut out of the market by government Interventionism.
 
cool story, ziggy.
unfortunately you're not an economist. and many venerated and world-renowned economists disagree with your simplistic little breakdown. so maybe it's not as "fucking basic" as you would like to think.
 
pete said:
cool story, ziggy.
unfortunately you're not an economist. and many venerated and world-renowned economists disagree with your simplistic little breakdown. so maybe it's not as "fucking basic" as you would like to think.
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When the goal is political with a desired economic outcome of Social Justice, then the Sophism will be laid on thickly.

Have you read Frédéric Bastiat's Sophisms of the Protectionists? In the early 19th century he had already thoroughly demolished the arguments being employed today in favor of floors, ceilings and barriers. That includes many of the sophisms being employed in this thread.

It's a free download (as is The Law) and a most excellent read.
 
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